Chesapeake Energy reports improved results

Chesapeake Energy, the nation’s second-largest natural gas driller, reported narrowed first-quarter losses Thursday and a $470 million sale of assets that could provide the company with a little more breathing room after nearly a decade of declines.

The company will sell about 42,000 acres of assets to energy company Newfield Exploration for $470 million. The deal is expected to close in the second quarter.

“This transaction contributes substantially to achieving our previously announced target of an incremental $500 million to $1 billion of asset sales by year-end,” Chesapeake CEO Doug Lawler said in a company release.

Lawler said more sales are on the way over the next six months. Chesapeake shares (ticker: CHK) gained 6 cents to close at $5.71 a share.

The company, once a leader in the Barnett Shale drilling boom in North Texas, has slashed spending, sold assets and cut jobs to account for plunging energy prices. Last month, it also ended dividend payments for its preferred stock, a maneuver that saves the company $170 million per year.

Massive layoffs throughout the energy sector have weighed heavily on states that rode an energy boom which sent oil prices close to $150 per barrel just before the recession.

That includes Oklahoma, where the name Chesapeake adorns the basketball arena of the NBA’s Oklahoma City Thunder.

On Thursday, Chesapeake reported losses of $921 million, or $1.44 per share, in the three months ending March 31. This week, Devon Energy, another Oklahoma City company whose building towers over downtown, announced a first-quarter loss of $3.06 billion, or $6.44 per share.

Earlier this year, Chesapeake assured investors that it was not seeking bankruptcy protection, and its stock is up 30 percent since falling to decade lows of $1.50 per share in February.

Chesapeake faces tremendous pressure from long-term debt and other obligations after incredibly aggressive growth under company founder Aubrey McClendon, who left the company in 2013.

McClendon died in March after the SUV he was driving slammed in into a bridge support at 78 mph. A day earlier, a federal grand jury indicted him on charges of conspiring to rig bids for gas leases in Oklahoma from 2007 to 2012.

This story was originally published May 5, 2016 at 5:44 PM with the headline "Chesapeake Energy reports improved results."